Kenya’s economy is forecast to grow 6.3 per cent this year, up from an estimated 6.1 per cent in 2023, the Finance Ministry said on Thursday, raising its previous forecasts.

However, the projections were silent about the job creations and meteoric rise in unemployment despite the  government investing hope in the construction industry following the signing into law the controversial housing tax bill by President William Ruto.

The ministry had said in February that it expected growth for this year and 2023 would be 5.5 per cent, up from 4.8 per cent in 2022.

The upgraded forecast for this year, and last year’s estimate, were contained in the government’s economic plan for the period to the end of 2027, which was released at an event in the capital Nairobi.

The growth would be driven by expansion in agriculture, small and medium businesses, the government said in the economic plan.

The projection come on the back of three years when the economy was in doldrums as a result of the coronavirus pandemic and drought that adversely affected food production and investments.

According to the Kenya Economic Outlook, “real GDP growth slowed to 5.5 per cent in 2022 from 7.5 per cent in 2021, attributable to the drought, increased commodity prices, and tight global financial conditions. Growth was driven on the supply side by services and on the demand side by household consumption.”

The report adds, “Inflation rose to 7.6 per cent from 6.1 per cent in 2021, driven by food and energy inflation. Inflation was moderated by subsidies and raising the policy rate to 8.25 per cent from 7 per cent in 2021. The fiscal deficit narrowed to 6.3 per cent of GDP from 8.2 per cent in 2021 due to improved revenue collection and adherence to the International Monetary Fund-supported fiscal consolidation path.”

• A Tell / Reuters report